Toronto stocks hit hard by slumping commodities

Tue Sep 9, 2008 5:58pm EDT
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By Natasha Elkington

TORONTO (Reuters) - The Toronto Stock Exchange's main index plunged more than 3 percent on Tuesday, weighed down by falling commodity prices and closing in on January's 2008 low.

The heavyweight materials and energy sectors led the way down. Oil prices tumbled on expectations OPEC would leave output targets unchanged and as the hurricane threat to U.S oil operations in the Gulf of Mexico eased.

In the oil patch, Canadian Natural Resources (CNQ.TO: Quote) fell 6.9 percent to C$74.50.

A drop in metals prices hurt the materials sector, where fertilizer producer Potash Corp of Saskatchewan (POT.TO: Quote), one of the biggest losers, was down 7.5 percent to C$150.27.

The large financial sector held up better than the resource groups, but still fell 1.2 percent as worries about the ability of U.S. investment bank Lehman Brothers LEH.N to raise capital fueled concern about the broader banking sector.

"I think with the global slowdown that we have, it's not surprise that the commodities have been reduced in prices to where they right are now," said Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc.

"I do think in the long term the demand for commodities will pick up again. It just doesn't look as if it will happen in the very near future, right now it looks gloomy," he said.

The S&P/TSX composite index .GSPTSE closed down 487.88 points, or 3.86 percent, at 12,146.76 with eight out of 10 sectors down.   Continued...

<p>A Toronto Stock Exchange logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch</p>